Question

The following book and fair values were available for Westmont Company as of March 1. Inventory Land Buildings Customer relationships Accounts payable Common stock Additional paid-in capital Retained earnings 1/1 Revenues Expenses Book Value Fair Value $ 398,500 $ 359,500 823,500 1,137,750 1,965,000 2,330,250 0 842,250 (113,500) (113,500) (2,000,000) (500,000) (399,500) (486,000) 312,000 Arturo Company pays $3,530,000 cash and issues 24,600 shares of its $2 par value common stock (fair value of $50 per share) for all of Westmont's common stock in a merger, after which Westmont will cease to exist as a separate entity. Stock issue costs amount to $33,900 and Arturo pays $51,400 for legal fees to complete the transaction. Prepare Arturo's journal entry to record its acquisition of Westmont. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 Record the acquisition of Westmont Company. Note: Enter debits before credits. General Journal Debit Credit Transaction 1

Answer 1

Answer:

Trans	Particulars	Debit ($)	Credit ($)
1	Inventory	359500
	Land	1137750
	Building	2330250
	Customer Relationships	842250
	Goodwill (Bal fig)	692500
	Accounts pyabale		602250
	Common stock (24600*2)		49200
	Additional paid in capital (24600 shares * 48)		1180800
	Cash		3530000
	(To record the take over of assets and liabilities)
2	Legal fees	51400
	Cash		51400
	(To record the payment of leagal fees)
3	Stock issue costs	33900
	Cash		33900
	(To record the payment of stock issue cost)